A bond of the 17th century, on which interest is still received

Blogger Tom Scott spoke with Geert Rouwenhorst, a professor of corporate finance at Yale University (Connecticut, USA), about a 369-year bond kept in the archives of an educational institution.

The security was issued on May 15, 1648 by the Dutch cooperative De Stichtse Rijnlanden, consisting of landowners and wealthy citizens who operated the dikes and canals of the Lower Rhine region. The document was issued in order to finance the construction of a pier on the Lek River.

A bond is a piece of goat skin. The maturity of the paper was not negotiated, and the text indicated that it could be indefinitely earned at 5% per annum (although the interest rate was first reduced to 3.5% and then to 2.5%).

Yale University purchased the document in 2003 for 24 thousand euros. For some time, his staff did not consider the ancient bond as a means of making a profit.And in 2015, Reuvenhorst went to the headquarters of the Water Resources Administration in the Dutch city of Utrecht and for the first time in 26 years received interest on a security (about 136.2 euros).

A Yale bond is an extremely rare example of securities issued without maturity and still paying interest. It's amazing that this still exists, - said Gert Reuvenhorst, a professor at Yale University.